1. Field of the Invention
The invention disclosed and claimed herein generally pertains to a method for analyzing demand coverage, in view of forecast or anticipated demand for parts of specified types. More particularly, the invention pertains to a method of the above type wherein the inventory contains both current parts of the specified type, and substitute parts that are functionally equivalent to the current parts. Even more particularly, the invention pertains to a method of the above type for optimizing substitute part usage, maximizing the potential for on-hand inventory to meet serviceability requirements, and minimizing the potential for inventory carrying costs.
2. Description of the Related Art
It is frequently necessary to introduce a modified form of a manufactured part that complies with certain regulations, in order to use the part on certain products or to ship it into certain countries or jurisdictions. For example, a country may decide to demand compliance with RoHS (Restriction of Hazardous Substances) standards, so that a certain material can no longer be used in a particular type of part. Accordingly, the part manufacturer will design a modified part that is functionally equivalent to the previous parts, but no longer uses the material. Typically, the new part will become the “current” part of that particular part type.
When the new current part is introduced, it is likely that there will still be a number of older parts, and possibly a very large number, remaining in inventory. Since these parts and the new current parts are functionally equivalent to one another, the older parts can still be readily substituted for the new current parts, for many applications. Thus, if some countries are not concerned about the RoHS material that led to the new current parts, the older parts can continue to be used for products sent to those countries. At least some of the time it is beneficial to substitute older parts for the current parts, when this is permitted. As a result, it has become common, when analyzing future or upcoming demand for a particular part, to consider the portion of the demand that must be covered using current parts, and the portion that is allowed to be covered using older parts. For example, it may be determined, based on experience and other factors, that 60% of the anticipated demand for a particular part type will need current parts, whereas the older parts can be used as substitutes to meet 40% of the demand.
Present planning systems such as the Manufacturing Resource Planning (MRP) have no capability for automatically ensuring that percentages of the above type will be considered, when planning demand coverage that apportions between current new parts and equivalent older substitute parts. As a result, significant manual planning effort may be required, in order to ensure that current part percentage requirements are complied with. This deficiency may also result in ineffective application in the use of substitute parts.
One present solution to this problem is to supplement MRP recommendations with significant manual planning. This approach uses existing MRP recommendations and substitution logic, and then augments this with miscellaneous demands to procure specific required parts. However, this solution tends to result in excess inventory and scrap, as well as significant manual effort to independently manage the miscellaneous demands on a part-by-part basis.
A further solution is to manually override the MRP results, in order to adjust purchasing recommendations on a part-by-part basis. This is very manually intensive, and would be subject to change based on the demand and inventory levels, both in manufacturing and at the vendor, for every MRP run.
Another approach is to release a new Bill of Material for a new current part, and manage it independently from the equivalent older parts that can be substituted for the new part. This, however, tends to drive the purchasing of incorrect parts in the substitute structure, and also drives significant inventory increases.
Yet another solution would be to simply break in a new current part, and allow for no substitutions using older parts. This, however, would lead to increased inventory and/or scrap costs to the product.
There is currently no known automated process that allows a variable percentage of parts substitution while minimizing needed inventory. The labor to manage such situations manually is excessive, and can significantly impact inventory by driving costs and serviceability issues.